BSI's housekeeping bill

New taxes will swell BSI's housekeeping bill

Australian currency revaluations hit Solomon Islands’ customs revenue so hard that the Financial Secretary, Mr R. J. Wallace, has had to introduce some new taxes, and increase others to meet a threatened gap between revenue and expenditure in 1974.

The budget for 1974 includes a 10 per cent surcharge on the existing tariff on all imported goods, other than meat and fish preparations, rice, flour, sugar, detergents, petrol and kerosene.

The surcharge on all alcohol other than beer will be 20 per cent. The beer surcharge will be 10 per cent.

There will also be an increase of 10 per cent in the preferential (10 per cent) and general (27T per cent) tariffs on non-alcoholic beverages, and a new preferential tariff of 37i per cent on all imported fresh and frozen fruits and vegetables, and on prepared foods for household pets.

Mr Wallace told Governing Council that the estimate of local revenue for 1974 of $6,259,325, was about $700,000 more than the revised estimate for 1973. He expected that natural growth at existing levels of

taxations, fees and payment of ser vices would provide about $520,000 of the extra amount, and he proposed to raise the balance of $lBO,OOO through the new taxation, The BSIP had expected about $1.9 million in 1973 from export duties, but the latest estimate, be cause of the Australian revaluations, was $1.5 million. As import duties provided about one-third of the BSIP revenue it was quickly apparent how serious was the loss of about $400,000. As it was, imports which attracted little or no duty had risen whll e imports of manufactured goods, as clothing and household equipment, which attracted high duty, had fallen.

Mr Wallace lamented that the BSIP, like a number of other terri tories, was unable to take advantage of the current high prices for copra, Consistently low prices for a long

period discouraged local production.

Hurricane Ida and drought also cut * nto production, so that the 1973 ex- P ort figure was expected to be only 18,000 tons, compared with about 22,000 tons in 1972.

The timber industry was making

steady progress in exporting. In the first nine months of 1973 the ex ports totalled about 6.6 million cubic feet, which was about 400,000 cubic feet better than the figure for the first nine months of 1972.

Solomon Taiyo, a fishing com pany in which the BSIP had a sub stantial equity, started fishing about the middle of May and caught near ly 5,000 tonnes of fish, worth about $1.5 million by the middle of No vember. Exports of fish, 4,205 tonnes, earned about $71,000 in ex port duty. Export duty on fish for 1973 was expected to be about $lOO,OOO. Solomon Taiyo now em ployed 265 Solomon Islanders—l 34 of them at sea.

An encouraging feature in the search for minerals, was granting to CRA Explorations reconnaissance permits for Gela. The company, which was a subsidiary of CRA in Aust ralia, has applied for a reconn aissance permit for all San Cristobal and Santa Isabel.

The oil palm project was making satisfactory progress on 2,900 acres.

Mr Wallace said that as the BSIP moved to the last stage of the Sixth Development Plan, there was a sig nificant decline in the work available in the construction industry. But bank deposits and advances had been main tained. It seemed there was a lot of money in the country lying idle.

It had been suggested from sev eral quarters there was a crisis of confidence among private interests.

Overseas traders and investors were waiting to learn of the new govern ment's policies before building up stocks and supplies and developing their businesses. Early clarification of the government’s policy towards foreign investment and to foreign traders in particular, would probably help to restore some confidence.

Mr Wallace was speaking before Mr David Kausimae (Commerce and Industry Chairman) announced guide lines to be followed by foreign investors. (PIM, Jan, p 89). Mr Kau simae said he expected the proposals for control of investments, which em bodied the guidelines, would become policy in 1974.

The 1974 budget provided for an appropriation of $12,422,930 for services. Statutory expenditure would be $362,565. The estimate of local revenue was $6,259,325. Total aid sought from the UK was $6,049,465.

Total recurrent expenditure, inclu ding statutory expenditure, but ex cluding a 7i per cent deduction from personal emoluments, was estimated at $7,973,670, which was $260,000 more than the approved estimate for 1973.